Small Business Tax Deductions

Every dollar you deduct as a business expense reduces your taxable income — which reduces your tax bill. The IRS allows deductions for any ordinary and necessary business expense. Many small business owners leave hundreds or thousands of dollars in deductions unclaimed each year.

Commonly Missed Deductions

Home office deduction. If you use part of your home regularly and exclusively for business, deduct a portion of rent/mortgage, utilities, and insurance. The simplified method allows $5 per square foot up to 300 square feet.

Vehicle and mileage. Business driving is deductible at 67 cents per mile (2024). Track every mile — client visits, supply runs, and business meetings all count.

Health insurance premiums. Self-employed individuals can deduct 100% of health, dental, and vision premiums for themselves and their family.

Retirement contributions. SEP-IRA contributions up to 25% of net self-employment income are deductible.

Software and subscriptions. Every business tool — accounting software, project management, email marketing — is deductible.

Professional development. Courses, books, conferences, and coaching related to your business are fully deductible.